IRELAND’S CAMPAIGN for debt relief took a big hit four days ago when Germany, Finland and the Netherlands said in Helsinki that national bodies should remain liable for most bank losses.

The démarche has thrown into question the scope of a deal in June in which EU leaders pledged to sever the loop between bank and sovereign debt.

The manoeuvre by German finance minister Wolfgang Schäuble and his allies illustrates just how vulnerable our cash-strapped Coalition is to the whims of its euro zone partners.

Happy Birthday Wolfgang.

In a birthday speech Christine Lagarde, head of the International Monetary Fund and former French finance minister, said: “Europe has a heart and it beats in Wolfgang Schäuble. May it beat for many years to come.”

Banking union is necessary to restore the eurozone’s monetary transmission mechanism, destroyed by pernicious feedback loops between weak sovereigns and banks and national banking supervisors in the core imposing de facto capital controls disguised as prudential regulation.

Also necessary to save the euro and create the conditions for a resumption of growth is a restructuring of the debt of the most likely insolvent sovereigns – Greece, Portugal, Ireland, Cyprus and possibly Spain, Italy and Slovenia. Austerity fatigue in the periphery and growing bailout fatigue in the core mean that the ECB/euro system is the only Santa Claus capable of filling the solvency gaps of sovereigns and banks in the euro area. However, any attempt by the ECB/euro system to play this role on a sufficient scale to make a material difference would cause an exit of the strong, who reject the ECB as an open-ended Santa.

Finally, the German, Dutch and Finnish finance ministers argue that there should be no mutualisation by the ESM of sovereign debt incurred in past bank recapitalisations, including Spain’s. In the case of Ireland, which incurred about €63bn of sovereign debt recapitalising its banks, this significantly increases risks of an Irish sovereign default.

Anyone who claims to know their backside from their elbows on this matter must make plain their response to this topic.

You've seen what happened to Greece after they were forced into restructuring. You really want a taste of that for Ireland?

We've got a lot of prejudice against Greeks and Portuguese because of media exaggerations and their olive complexions. But the fact remains that their antagonists are the same as ours. We can form an alliance among the 3 of us and demand a better deal, or the disaster of Athens will sweep equally through Dublin and Lisboa.

This being P.ie, there are certainly tons of posters here who would genuinely prefer starvation to solidarity with brown-skinned people, but hopefully the thinking minority here will be able to see through the fog.

Anyone who claims to know their backside from their elbows on this matter must make plain their response to this topic.

You've seen what happened to Greece after they were forced into restructuring. You really want a taste of that for Ireland?

We've got a lot of prejudice against Greeks and Portuguese because of media exaggerations and their olive complexions. But the fact remains that their antagonists are the same as ours. We can form an alliance among the 3 of us and demand a better deal, or the disaster of Athens will sweep equally through Dublin and Lisboa.

This being P.ie, there are certainly tons of posters here who would genuinely prefer starvation to solidarity with brown-skinned people, but hopefully the thinking minority here will be able to see through the fog.

Totally agree with you that there is a total lack of solidarity between states and instead all want to paddle own canoes with Franco/German coxains. The Germans are not reminded of their benefits from an undervalued currency but instead Merkel has assumed the high ground while the serfs fall in line.
Have never heard of Greeks being called brown-skinned before and really feel that the absence of empathy or solidarity has nothing to do with racial issues on this occassion.

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